The Balanced Scorecard was developed by Norton & Kaplan. Balanced scorecard is a strategy performance management tool – a semi-standard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. In the procurement context a balanced scorecard can be useful for contract and supplier management.
Source of information below Scottish Gov
| Quality •Fit for purpose products/services •Returns •Continuous Improvement / Innovation •Change Management | Service •Responsiveness •Complaints •Management Information •Communication •Education / Training •Lead Time / Delivery Time •On time Delivery Against Objectives •Accuracy •Involvement/Ownership |
| Sustainability •Corporate Social Responsibility | Cost •Pricing Stability •Invoice Accuracy •Cost Reduction Initiatives |
Purchase a ready made excel balanced scorecard [coming soon]
Quality
| Key Performance Area | (Optional) Performance Criteria Considerations | 1 Major Concerns | 2 Minor Concerns | 3 Meeting Expectations | 4 Exceeding Expectations |
| Quality | Fit for purpose products SLA/KPI: – Supplying specifies products – Providing specified service levels | The supplier frequently fails to supply goods and provide a service which meets the specification. | The supplier usually supplies goods and provides a service which is compliant with the specification. | The supplier consistently supplies goods and provides a service which is compliant with the specification. | The supplier consistently exceeds the specification in terms of the goods and the service provided. |
| Returns KPI: – 100% reasons for returns provided | Goods frequently have to be returned or service is inadequate due to a failure by the supplier. | Goods occasionally have to be returned or service is inadequate due to a failure by the supplier. | Returns or service is inadequate due to a failure by the supplier are infrequent. | Returns or service is inadequate due to a failure by the supplier are rare and supplier actively works with customer to understand if there are other issues resulting in the return. | |
| Continual Improvement/Innovation Such as: – Identifying alternative products more suited to the users requirements – Product rationalisation to expedite same function products | The supplier does not identify or work with the buyer in identifying opportunities to introduce or implement improvements in the delivery of the contract | There are some attempts by the supplier at identifying opportunities for continue improvement and innovation. | The supplier and buyer work together in identifying opportunities for continual improvement or innovation during the contract performance review process. | Innovation is embedded as part of the business culture, the supplier works with the buyer in actively seeking opportunities for continual improvement and innovation, and share the benefits. | |
| Change Management Such as: – Reactive or proactive approach to change management | Does not respond to, or manage change effectively | Responds effectively to change requests when prompted, but the response can be slower than required | Responds effectively to change requests when prompted | Proactively considers change which could impact users, responds accordingly and communicates promptly |
Cost
| Key Performance Area | (Optional) Performance Criteria Considerations | 1 Major Concerns | 2 Minor Concerns | 3 Meeting Expectations | 4 Exceeding Expectations |
| Cost | Pricing Stability (outwith agreed 12 monthly pricing reviews) | Prices are unstable, frequent changes to prices | Infrequent changes to prices but not as a result of the agreed price review. | Prices remain stable for the agreed period of time. Any changes have been previously communicated as a result of formal price reviews | Prices remain stable after the price review. Supplier actively manages pricing – passes on savings/extends time period for fixed pricing |
| Invoice Accuracy Such as: – Promoting opportunities to improve invoice accuracy SLA/KPI: – Invoice queries resolved withing 24 hours | Invoices are frequently incorrect, invoices are unclear and queries are seldom resolved within 24 hours | Occasional problems with the accuracy of invoices, generally invoice queries are resolved within 24 hours | Invoices provide detailed, accurate cost information, queries seldom occur but are always resolved on the day they are raised. | The supplier is proactive in identifying opportunities to improve the invoice process to reduce error (cxml invoicing, pcards, punchout) | |
| Cost Reduction Intiatives Such as: – Promoting with organisations, the use of conrtracted products which offer better value – Promoting the use of consolidated invoicing – Promoting the use of consolidated ordering Promoting and supporting the use ofe-Procurement solution (eg ePS, supplier ordering portals etc) | The supplier does not identify initiatives which could result in cost reductions being achieved. | The supplier responds to cost reduction initiatives which are suggested by the buyer. | The supplier fully co-operates with the buyers in suggesting and responding to cost reduction initiatives. | The supplier is proactive in identifying cost reduction initiatives and promoting best practice in order that they are realised. |
